The 200 million yuan (24.7 million US dollars) project, located in the power plant in Yuhuan County, has a daily production capacity of 35,000 tons based on a desalination system that produces 1,440 tons of freshwater per hour.

The project in the drought-prone coastal county uses seawater from the East China Sea to produce freshwater to generate electricity.

China has announced more seawater desalination projects to combat water shortages in coastal areas.

According to the State Development and Reform Commission and some other state-level agencies, desalinated seawater is expected to contribute 16 to 24 percent of the water supply in coastal areas by 2010, with a daily capacity of up to 3 million cubic meters in 2020.

China is among the driest countries in the world, and 400 out of 600 Chinese cities suffer from water supply shortages for domestic and industrial uses.